Once considered speculative investments, cryptocurrencies are becoming increasingly mainstream. In Europe, WisdomTree is at the forefront of leading that charge. The global financial services firm offers a number of exchange-traded products (ETPs) that provide diversification and an incredibly easy way to buy and sell crypto assets.
In this discussion, Dovile Silenskyte, WisdomTree’s Director of Digital Assets Research, shares insights into crypto’s evolution as an asset class, recent adoption trends, and WisdomTree’s latest ETP based on the CoinDesk 20 index.
The Path to Mainstream Acceptance
As with every asset class, diversification is essential. Investors diversify across and within equity and bond positions, so it should be no different when considering allocating capital to cryptocurrencies. Relying solely on bitcoin is akin to holding only one stock in an equity portfolio, which is a suboptimal strategy in terms of risk-adjusted returns. A well-diversified approach across multiple digital assets can enhance exposure to the broader growth of the sector.
As the digital asset class evolves, investors require a benchmark to measure performance, invest, and trade. The CoinDesk 20 index serves as the benchmark index for the crypto industry and is the world’s most traded crypto index — it could be viewed as the S&P 500 of crypto. Taking a broad and diversified approach through the CoinDesk 20 provides a practical way to access opportunities across the digital asset market.
Simplifying Access for Investors
For investors who lack access to deep crypto knowledge, broad-based crypto indices offer a streamlined way to gain market exposure without the complexities of token selection. Just as ETF investors use index-based funds to gain equity exposure without stock-picking, a diversified crypto index allows for systematic, passive participation in the growth of digital assets.
Observing Adoption Trends
After more than 15 years of existence, multiple boom-and-bust cycles, and over half a billion users, cryptocurrencies have cemented their place as a major asset class rather than a passing trend. Bitcoin and ether have become integral components of institutional portfolios.
Despite the long-term growth potential of cryptocurrencies, many investors remain cautious. With a total market cap of approximately $3 trillion, the ecosystem and use cases are growing steadily, putting the crypto market on par with staple institutional investments such as high-yield bonds, inflation-linked bonds, and emerging markets small caps.
Crypto adoption is not monolithic; it varies across geographies based on regulatory landscapes, institutional infrastructure, and economic needs. Europe is leading the way, where investors have been able to invest in bitcoin exchange-traded products for over five years and now have access to a broad range of single coin and crypto basket ETPs.
WisdomTree’s Role in the Crypto Market
WisdomTree has been providing access to crypto via ETPs since 2019, expanding its range to include ETPs that offer exposure to five other individual coins and four diversified basket products, including its new ETP that provides exposure to the CoinDesk 20. These crypto ETPs leverage institutional-grade storage solutions ensuring high levels of security, and some also generate a staking yield. By incorporating staking into a crypto ETP, investors can gain exposure to the growth of these networks while also participating in their security and governance.
Introducing the WisdomTree Physical CoinDesk 20 ETP
The strategy behind the WisdomTree Physical CoinDesk 20 ETP is designed to help investors avoid the complexities of selecting individual assets. It aims to provide secure and diversified exposure to approximately 90% of the crypto market by market cap, contributing to the next wave of innovation. The strategy offers a highly diversified entry point into the crypto ecosystem, further democratizing access to a historically challenging market. Furthermore, it also aims to provide staking yield.
Further Information and Resources
For European investors interested in exploring WisdomTree’s physically-backed crypto ETP range, more information can be accessed here.
Disclosure: This material is prepared by WisdomTree and its affiliates and is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. The opinions expressed are as of the date of production and may change as subsequent conditions vary. The information and opinions contained in this material are derived from proprietary and non-proprietary sources. As such, no warranty of accuracy or reliability is given, and no responsibility arising in any other way for errors and omissions (including responsibility to any person by reason of negligence) is accepted by WisdomTree, nor any affiliate, nor any of their officers, employees or agents. Reliance upon information in this material is at the sole discretion of the reader. Past performance is not a reliable indicator of future performance.
Authors’ views and opinions are their own and not associated with CoinDesk Indices. The interview was conducted by CoinDesk Indices and is not associated with CoinDesk editorial.
CoinDesk Indices, Inc., including CC Data Limited, its affiliate which performs certain outsourced administration and calculation services on its behalf (collectively, “CoinDesk Indices”), does not sponsor, endorse, sell, promote, or manage any investment offered by any third party that seeks to provide an investment return based on the performance of any index. CoinDesk Indices is neither an investment adviser nor a commodity trading advisor and makes no representation regarding the advisability of making an investment linked to any CoinDesk Indices index.
